Staying focused on accounting is crucial when running any business. Your company will go down before it grows if you fail to properly manage marketing expenses, receivables, and debt.
Are you overwhelmed by the mess of your business finances and their lack of organization? Chances are you’re spending a significant amount of time trying to sort through your company’s financial details because of the absence of a proper financial system. To help you, this post has listed a few tips for streamlining business accounting below.
1. Stay On Top Of Tax Responsibilities
The financial health of your company can be affected by your tax responsibilities. That’s why keeping a record of tax dues is crucial. The last thing you’d want to happen is to receive a costly penalty because of missing an important deadline. It’s best to check resources that will remind you of those important income tax dates. Meet your ongoing tax obligations by becoming proactive about tracking your yearly tax deadlines.
2. Automate The Processes
Review the current set of tasks that you’re managing by hand. Are there things that can be automated with accounting software? Implementing the right system to automate busy work will save you hours of time.
The foundation of business accounting automation is to select the right software that offers the functions you need. You can opt for popular programs, but you can also go for alternative software to QuickBooks and Xero. It’s a matter of personal preference; what’s most important is implementing automation within your business accounting processes.
3. Go Paperless
The traditional way of managing business finances is to rely heavily on paper-based documentation. The problem is that papers pile up fast. Also, if you fail to stay consistent with everything, the filing can easily turn into a nightmare. If there are options to go paperless instead of juggling pile after pile of paperwork, why not take advantage of them?
A paperless system for tracking business finances provides numerous benefits, such as protecting the environment, reducing busy work in your office, and increasing productivity. One way to manage all important documents, like contracts, invoices, and receipts, is to use accounting or bookkeeping software.
4. Separate Borrowed Funds From Accounts Receivables
The money needed for the initial necessities in a startup’s early days, such as capital and marketing campaigns, can be too heavy for business owners. No wonder many entrepreneurs take out loans that serve as their financial backing. If you’ve opted to go for such an option, be sure to separate borrowed funds from accounts receivables. It’s important not to lose sight of what needs paying back and what’s yours. Note that some accounting tools also have a function for separating income from loaned funds.
5. Get Professional Help
While accounting or bookkeeping programs can help you make the managing of your business finances easier, the accuracy that professional help provides is still important. Consider hiring a bookkeeper for tracking details and maintaining ongoing financial transactions. Having an accountant to help you with financial tasks, such as tax filing, is also a good idea.
Note that getting professional help from a bookkeeper and accountant doesn’t mean you’re disregarding the automation that software and tools provide. In fact, these professionals can manage accounting and bookkeeping programs for you more effectively. They can help you obtain a better grasp of your company’s financial health. As a result, you can make the right decisions in protecting the financial interests of your business.
6. Make Sure Customers Don’t Get Away With Not Paying Their Balances
Remember that money doesn’t count until it’s already in your bank account. That’s why seeing a large amount in your business receivables column isn’t enough. You have to make sure that clients don’t avoid regular payments. A good practice is only to let customers have more services or materials when they already have made payment for past orders. Updating your billing, adding a payment solution, and invoicing software to improve your invoices also make sense.
When invoicing, it’s important to be polite but assertive. Aside from being clear in your expectations as to when and how clients can provide payment, sending invoices as soon as a product is delivered or a job is completed is also essential. In case you don’t receive payment or hear back after a certain period, it’s best to have a standard follow-up procedure arranged as well.
Making sure that customers don’t get away with not paying their balances is one way of justifying the hard work that you and your staff have done to provide impeccable services and quality goods to clients.
7. Budget For The Coming Weeks By Detailing Daily Expenses
Focus on every week or every day when calculating expenses instead of doing it every two weeks. Keeping records of everyday expenses is an excellent idea for business owners to follow. It can help them have a better idea of how much money is needed to budget for the upcoming weeks since they know where finances go each week.
8. Put Money Aside To Cover Unexpected Costs
Business owners are more likely to encounter unforeseen costs the longer their respective ventures are in operation. Equipment upgrades or building repair, for instance, is unavoidable for your business to continue to operate. The problem is that these projects can be costly, too.
A chance to grow or expand your business could even be an unexpected cost. Taking advantage of opportunities, such as a market gap, for example, requires an upfront investment.
The best thing to do is to expect the unexpected. Give yourself the best chance to cover unforeseen costs by putting money aside for these things. You can avoid missing out on a rare chance to grow your business or save yourself the headache of scrambling to take care of a large bill by doing so.
Accounting is crucial for any business. Companies will sink without it. Such a process is as important in your first few days in business as it is in the tax season. Streamline your business accounting by implementing the eight tips above. These can keep the finances of your business healthy, as well as bring stability to your everyday operations.